LONDON - Ruffer Investment Company Limited, a closed-ended investment firm, reported a broadly flat performance for its portfolio in November 2024, despite a rally in U.S. stock markets following the re-election of Donald Trump as President. The S&P 500 index experienced a significant rise, increasing nearly 6% and reaching an all-time high, buoyed by investor optimism around the new administration's policies.
Notably, assets closely associated with the Trump administration, such as Tesla (NASDAQ:TSLA) and Bitcoin, saw substantial gains of over 40% since the election. The U.S. dollar strengthened on sentiments of American 'exceptionalism', while bond yields, which had initially surged before the election, moderated after Scott Bessent was nominated for Treasury Secretary.
The bond market's response to the election results has sparked discussions about the potential return of bond vigilantes, a group of investors who protest monetary or fiscal policies they consider inflationary by selling bonds, thus increasing yields. This speculation arises as the Trump administration plans to cut taxes while funding a record fiscal deficit, with bond issuance expected to surpass 10% of GDP annually during Trump's term.
Ruffer's portfolio, which includes a significant allocation to cash equities, averaging 25%-30% this year, remained focused on protection, mirroring the firm's strategy during the lead-up to the 2007 global financial crisis. Despite market exuberance, Ruffer maintains a cautious stance, emphasizing the importance of a balanced portfolio geared towards protection, given the current market conditions that the firm views as overpriced and concentrated.
The company's equity exposure was the largest positive contributor to its performance, supported by strategic additions around the election. The portfolio's resilience, despite market events that contrasted with Ruffer's conservative market outlook, reflects the firm's balanced approach.
The information in this article is based on a press release statement from Ruffer Investment Company Limited.
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